Is It Time to Buy ENA? Ethena Pay, The Equity Basis Trade, and The Token Cleanup
- Ethena Pay is pitched as a non-custodial global neobank that makes crypto infrastructure disappear. Users can save, spend, and send money while avoiding seed phrases, gas, bridges, and stablecoin selection; Lito said the app operated in 50 countries, with 100 and then 150 targeted. The ambition is a product “my mom could use.”
- Ethena’s structural advantage is the vertical integration of USDe’s yield engine with the consumer app above it. Lito noted that net interest margin contributes 37% of Robinhood’s revenue and roughly 25% of Revolut’s, arguing Ethena can monetize balances while offering fiat rails and other features “for free or, in the worst case, at cost.”
- Equity-basis trading could become Ethena’s next differentiated yield source. Lito argued that stocks continue trading through bear markets, the stock market is “100 times bigger” than crypto, and equity perpetual activity might eventually surpass crypto perpetuals. Ethena’s claimed edge is execution: “No neobank, no other DeFi protocol, no one at all” has comparable multi-venue basis-trading experience at billion-dollar scale.
- The expanded USDe mandate reduces reliance on bullish crypto funding rates. Alongside the original delta-neutral crypto basis trade, Ethena described institutional BTC and ETH lending, limited DeFi lending, highly rated tokenized funds, Treasury bills, liquid reserves, and soon equity-basis allocations. Lito expected the new mix might lift USDe’s weekly rate and support its market capitalization.
- The ENA cleanup was presented as eliminating the visible token-supply overhang. A fund bought tokens from existing investors who had sold during their unlock, around the 7-cent low, while remaining investor vesting was accelerated so ENA would be fully unlocked on October 5, as described at recording. Even Lito said, “I was as surprised as you” when the announcement appeared.
- Ethena’s competitive case against Ether.fi and other neobanks rests on trust, UX, and execution rather than exclusivity. Lito said the category can expand without Ethena poaching existing users, cited Ethena’s record managing $15 billion without losing a cent, and reduced the durable moat to one line: “The only thing that can’t be copied is execution.”
- Distribution was already capacity-constrained, with more than 10,000 people waiting for access. At recording, Ethena Pay offered yield of up to 6%, zero-fee USD/EUR/GBP onboarding, nickname transfers, international bank payments, Apple Pay spending, and crypto cashback of up to 5%; a US launch was expected in three to four weeks. The product thesis is simply “save, spend, and send money.”
1. A construction detour brought Lito back to consumer crypto
Lito traced his nine-year crypto path from teaching newcomers through Crypto Testers in 2020—MetaMask, Aave, and Uniswap tutorials included—to working on the Hop and Socket bridges. Cross-chain infrastructure had once felt essential, but eventually became “a kind of commodity and solved problem.”
After losing motivation, having a child, and moving countries, he left Socket and spent four or five months helping his builder father-in-law build a house. It was “the hardest job of my life,” but taught him the value of physical work—and how “lucky,” in quotation marks, laptop workers are.
Ethena then approached him to help launch Ethena Pay, a consumer product aligned with his long-standing desire to onboard ordinary users. He called it “a match made in heaven,” abandoned plans for a longer break, went through roughly 10 interviews, and took responsibility for the go-to-market effort.
2. Ethena Pay hides the chain while preserving self-custody
Lito’s 60-second pitch was a mobile app for saving, spending, and sending money globally. The crucial distinction is non-custody: users alone control their wallets, allowing Ethena to expand faster than a bank or fintech that directly holds customer funds.
The intended experience hides most chain complexity, including seed phrases, gas, bridges, and choices among USDC, USDT, USDe, and PYUSD. Registration should feel like Venmo, even though the underlying product combines crypto balances with cards and fiat transfers.
Users can deposit stablecoins or other crypto and have them converted into a dollar balance earning up to 6% without manually entering a vault. USD, EUR, and GBP bank transfers were also supported with “literally zero, no foreign exchange fees, nothing,” according to Lito.
Nickname-based transfers carry no gas fees, while the card can be added to Apple Pay and pays crypto cashback of up to 5%. Cross-chain deposits are similarly abstracted: users select their source network, send to a generated address, and funds ultimately reach Ethena Pay on Avalanche.
3. Owning the dollar changes the neobank economics
Lito argued that competitors generally place a card or DeFi vault over somebody else’s stablecoin. Ethena instead owns the digital-dollar asset, its yield mechanism, and the consumer app—avoiding the profit-sharing arrangement of a white-label issuer.
That matters because balance monetization reportedly supplies 37% of Robinhood’s revenue and about 25% of Revolut’s. Ethena can therefore treat gateways, card currency markups, and adjacent services as acquisition tools while allocating the portfolio among basis trades, institutional lending, DeFi, tokenized funds, or Treasury bills. Lito also said a white-label competitor’s assets were only partly placed in Treasury bills.
DeFi Dad said he had been the one to change his mind about mobile crypto. Lito credited Argent’s Itamar for seeing the opportunity in 2019 but arriving before Ethereum fees and successive chain limitations were manageable; now strong mobile UX can “spread like wildfire” and scale to one or two million users, as he discussed in connection with FOMO.
Ether.fi remained the clearest competitor, particularly with crypto-backed borrowing that DeFi Dad’s accountants viewed as “some kind of alchemy or black magic.” Lito declined to attack rivals: the market can grow around everyone, and Ethena’s real defense is the trust it has built at scale, product UX, and execution.
4. Equity basis broadens USDe beyond the crypto cycle
DeFi Dad described Ethena’s original crypto basis trade as a roughly 50%-long spot and 50%-short perpetual structure that earns funding when the short positions receive payouts. Lito contrasted it with stock trading, which he said remains profitable even in bear markets as crypto activity contracts.
Lito said on-chain stocks and related real-world assets were unusual in continuing to grow through the bear market. He said the sector represented about 50% of crypto open interest and volume, and argued that equity perpetuals could eventually exceed crypto perpetuals because the underlying stock market is about 100 times larger.
Ethena had not yet allocated to equity trades at recording, but expected to begin “literally in a few days.” Other sources Lito listed included loans to institutional borrowers seeking long BTC and ETH positions, mainly through FalconX and other institutional lending units; limited DeFi lending; some lending through tokenized funds; AAA-rated instruments; Treasury bills; and liquid assets as a reserve buffer.
5. ENA’s cleanup trades future overhang for immediate clarity
Lito learned about the token changes alongside the public. A fund approached existing investors who had sold tokens during their unlock and offered to buy them back around the 7-cent low; many of those investors no longer held the tokens, while the fund held more of the supply.
Remaining investor unlocks were accelerated rather than stretched over another year, making October 5 the stated date for full unlocking. Lito’s interpretation was that the feared supply overhang would then be gone; the hosts, both ENA holders, viewed the package as almost exactly what long-term token owners wanted.
StablecoinX was explicitly described as separate from Ethena despite its confusing Nasdaq ticker, USDE. Its mandate was to accumulate ENA, not maintain a dollar peg. Lito said the apparent recent CEO change put a former Franklin Templeton head in that role, while Tae Chen remained involved at board or chairman level; “That’s literally all I know.”
Near-term capacity remained the constraint. More than 10,000 people were on the Ethena Pay waiting list, onboarding was proceeding week by week, and a US release was targeted within three to four weeks; Lito also expected equity-basis deployment to become visible in USDe’s weekly rate.
Full transcript
1. Closing
You know, probably in the not-too-distant future you'll have more stocks per transaction than cryptocurrencies, which, you know, would be a crazy shift, and we're excited about that. But if you think about it, it makes sense, because if you look at the size of the stock market and the cryptocurrency market, stocks are 100 times bigger, right? So it will continue to grow. It makes sense that we want to put money into these deals because we know that it works great for cryptocurrencies, and it will work just as well for stocks, and that's exactly the kind of activity where we have an advantage over anyone else in the market, right? We know how to safely execute these deals across multiple platforms, and have already done so with billions in assets under management. No one else can repeat this. No neobanks, no other DeFi protocol, no one, and therefore we will be able to generate significantly higher income by directing funds to stock transactions. Nothing said on the Edge podcast is a recommendation to buy or sell tokens or securities. This content is intended for educational and entertainment purposes only. Nothing stated here constitutes financial advice. Welcome to the Edge Podcast. I'm DeFi Dad, with me is Nomadic. Today, Lido, Head of Development at Athena Pay, is participating in the show.
Lito, thank you for joining us. How are you?
I am doing very well. Very happy to be here.
We’re very happy to see you on our podcast. We’ve had the honor of knowing you through many projects over the years. You’ve been a very reputable investor in DeFi, and we’re thrilled to have you join the Ethena team.
You recently made an announcement regarding Ethena Pay. This looks like a neobank, so we want to learn more about it and how it fits into Ethena’s product line. We also want to learn about Ethena’s expanded mandate for profitability, going beyond basic network agreements, so we look forward to the discussion.
2. Lito’s background in DeFi
There were also significant updates regarding the unlocking of ENA tokens. We’d like to receive a summary of this matter and learn why the team made these changes. So, let’s start with who you are and what projects you’ve worked on over the years.
We’ll try to be concise, but yes, I’m Lito. I’ve been in crypto for almost 9 years. Actually, I would describe myself as someone quite similar to you in DeFi, in the sense that, over all these years, I’ve just tried to be very curious. I’m very passionate about this field.
I was just a user of everything, and I had a lot of fun along the way, met a lot of interesting people, and gained a lot of experience that is pretty valuable today, as it turns out, because the field has actually become quite big and quite important. Not many people have all those contacts that someone who joined this field, well, let’s say, 5 or 10 years ago, can provide.
I had different roles in crypto. In 2020, I created an educational crypto platform called Crypto Testers, where I tried to educate people about this new space. I did podcasts like you did for a year or two and created video tutorials, such as how to create a MetaMask wallet, how to use Aave, and how to use Uniswap—all these things.
I held weekly Zoom meetings where I was trying to bring in newcomers because I was so passionate and wanted to bring more people into this space. I did a lot of these meetings and virtual meetups, and then later, in 2022, I joined a startup or protocol called Hop, which was the first Layer 2 bridge.
I thought the Layer 2 solution was a crucial part of the whole crypto space because the blockchain space was too expensive on Ethereum. Layer 2 solutions were the obvious solution to this problem, but bridges were needed to make rollups and asset movement between them seamless.
I worked there for a couple of years, and then I joined Socket, another player in the cross-chain bridge space. After that, I took a short break for a few months and then, very recently, joined Ethena. That’s where I’m leading the market launch of this new product that you mentioned earlier, Ethena Pay.
That’s cool, dude. Listening to you, I see so much in common between you and DeFi Dad. I think I mentioned this on the podcast, but I learned DeFi from DeFi Dad. You both created very similar content at the same time, and I’ve personally really enjoyed your Twitter feed over the years.
I want to briefly touch on one point that seemed very interesting to me during the last bear market. It seemed like you took a little break from the cryptosphere. You started building. When I saw it, I thought, “Damn. That’s cool.”
When you sit at a keyboard all day long and do desk work, you feel like your body needs to go chop wood or do some physical effort. What am I doing sitting in an office all day and just clicking keys?
But anyway, tell us how it was. The last time I saw you, you were doing construction, and then—bam—you got hired at Ethena, and I think that makes perfect sense. Maybe you can tell us about this transition.
Actually, I didn’t quit my last job at Socket, which is a great company, by the way. I’m still very close friends with the founders, but I was—well, I don’t want to say “burned out”—in a state where I just didn’t have the motivation to do what I did every day anymore.
I also believe that the field of cross-chain bridges has become less interesting over time, as it has become a kind of commodity and a solved problem. Three or four years ago, it was a really big unresolved topic, and I was working on something that I used to enjoy but that no longer brought me joy.
I decided to take a break. I resigned, also due to certain personal circumstances, such as having a child and moving to another country. It so happened that my father-in-law was a builder, and he was working on a house. It also coincided with a very brutal bear market.
I’ve never been a person who just goes completely off the grid because I’m, again, too passionate about this area. But I was glad for a little distraction from cryptocurrencies. Exactly like you said, chopping wood was just a place to let off all the steam and blow it out. I built this house for 4 or 5 months, I think.
Honestly, it was the hardest job of my life, for sure. I’ve done manual labor in the past, but nothing like construction. It taught me a lot about building houses and construction in general, but more specifically about the value of hard work and how “lucky” we are, in quotes, to be sitting in front of a laptop every day.
It was a great experience. At some point, the house was ready. I had nothing to do anymore, and I probably would have just continued living this life and enjoying my time with my kid a little longer. But it so happened that this guy finally contacted me one day and asked if I wanted to come on board to build or help build this new product, which we now know as Ethena Pay.
It was a match made in heaven. I’ve always dreamed of getting people into this space and working on a consumer product—something that’s really easy to use, something that my mom could use. Ethena is a big brand, well-capitalized and reliable, with a founder who’s really inspiring and someone I look up to.
It was perfect, and I dropped all my plans to take a longer break and just got right into it. About a week later I was—actually, no, it was about 2 weeks later when I flew out for an off-site meeting.
In between all of that, there was still a huge interview process that I wasn’t expecting because I thought I had already been offered the job, since it was offered to me. I had about 10 different interviews, so at that point I realized these guys were serious and didn’t want to hire just anyone.
Luckily, I got through it, and today I’m leading the market launch of Ethena Pay.
I had no idea you went to work on a construction site for 4 or 5 months. It’s funny because I was definitely talking to you at the time, just about different DeFi projects, whether it was Ethena or something like Fluid.
You are a real builder. Now we know you’re a real builder, off-grid and on-grid.
That’s so interesting. I didn’t even guess. Your timing looks pretty epic, too. I was looking at your Twitter profile, and it looks like you might have mentioned something like this around December 2025.
3. What is Ethena Pay?
So, if I’ve timed it right, it looks pretty brilliant looking back, and it looks like you came back just in time for all the new innovations in the bull market. Why don’t we talk a little more about Ethena Pay?
You started to describe a little bit of what the mission was, so give us a short presentation. What is Ethena Pay in 60 seconds?
Ethena Pay is a mobile app that lets you save, spend, and send money to anyone in the world for free. It covers all the basic actions that someone would look for in a financial app: earning money on your balance, spending your balance with a credit card, and doing P2P transactions between friends, family, and others.
I think the important thing to know about Ethena Pay is that it is truly a non-custodial wallet. Your funds are in a wallet that only you control. We don’t control it. So, we can roll this out almost globally from day 1.
So, technically, we operate in 50 countries today, but very quickly we'll be rolling this out to 100 and then 150 countries, which is a rate of expansion that can't be matched by a fintech or a bank that holds users' funds. So, yes, we are a non-custodial wallet, and we are, in a way, combining this non-custodial crypto infrastructure with fiat to really meet all the needs of users who are crypto natives today, making money online, but who also have real-life needs, wanting to spend money from a card, do bank transfers, and so on.
So, yes, this app is really a replacement—a perfect replacement—for all the crypto natives who earn online and have expenses in real life. And this is only in the short term. In the medium to long term, we actually want to use this as a means to bring the whole world into crypto, to put it in a very exaggerated way. But, of course, we aim to increase the share of users who use USDe today and potentially put it into the hands of millions and millions of people.
And I think, in terms of user experience and format, this is the closest I've seen to a non-custodial crypto app becoming usable by, say, my mom or a 50-year-old person, because everything is as simplified as possible. It starts with registration, where you don't need a seed phrase, and you don't need to know about gas, bridges, or the different types of stablecoins that exist in this space, whether it's USDC, USDT, USDe, or PYUSD. All of this is perfectly hidden from the user.
It really feels like signing up for, I don't know, Venmo or some other popular fintech app.
4. Ethena Pay’s edge as a neobank and stablecoin issuer
I like this proliferation of neobanks. I think, ultimately, it will be much better for customers and users. We have been held hostage to the worst interest rates on our savings, and I want to talk more about competitors in this area because, in my opinion, there are a lot of them.
But one thing that sets you apart, and I want to talk about right away, is that we've seen a lot of neobanks emerge, but I feel like you have a certain competitive advantage in issuing your own dollar. It seems to me, at first glance, that there are no other neobanks that are also issuers of their own dollar in the USDe format. Tell us a little about the advantages that this provides. What does this allow you to do that others may not be able to do right now?
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Yes, that's right. There is no other competitor that has a vertically integrated stack: a dollar asset with a yield mechanism and a neobank standing on top of that. They all essentially use someone else's stablecoin under the hood and then build a card on top.
If you look at the business model of any fintech—for example, banks or companies like Robinhood and Revolut—one of the main sources of income is the monetization of user account balances. This is called NIM, or net interest margin. This represents 37% of Robinhood's revenue and about 25% of Revolut's revenue. These are quite diverse examples, as Revolut has a diversified business, but despite this, net interest margin remains a significant source of income.
And so, owning this asset and having the user hold their balance in it is very, very valuable. There is another competitor, it seems, that has launched a white-label stablecoin, and this, you could say, brings them one step closer to us. But it's still not quite the same, because with a white-label stablecoin, you share your profits with the issuer, and, moreover, the assets are only partially placed in Treasury bills—not everything is distributed.
For us, this revenue-generation mechanism is our core business. We're splitting the portfolio between different lines of business, whether it's institutional lending—for example, crypto-backed lending to institutions—or DeFi lending, crypto basis trading, and equity basis trading. But we can also always go back to Treasury bills if needed.
In essence, it is much more flexible, and we will always be able to offer a better risk-adjusted return than any competitor in the market. Whether they create their own stablecoin or use USDC or USDT, our digital dollar will always have the best rate.
And besides, we can build a lot of interesting things because it allows us not to try to monetize certain features that other competitors make money on, like fiat gateways or markups on currency transactions on cards. We enter the market offering all these related features for free or, in the worst case, at cost.
For us, the main thing is monetization through net interest margin, and this is, in fact, our main KPI.
5. The mobile app breakthrough for DeFi
I want to come back to the fact that mobile apps have been a real breakthrough for us in the DeFi space. It looks like you plan to offer a lot of features with Ethena Pay. I use a lot of things in Monad and EtherFi right now. I just tried the FOMO app that has everyone going crazy over meme coin trading.
I was looking at the Markets app, which is more like a high-liquidity mobile app, but I had no idea how easy it had become to set up DeFi-based mobile apps. I'm used to—well, I guess Argent was something of an eyesore to me at first and probably deserves the most respect as a true pioneer in making a DeFi-based mobile app as simple as possible, something even your grandma could handle.
But even then, we were used to having to enable two-factor authentication from the start, connect a real wallet, or scan something on the desktop. The recent breakthrough is that mobile apps are experiencing the same breakthrough that e-commerce with websites perhaps experienced 10–15 years ago. There are no longer any obstacles to creating such a mobile application.
It's more about what goes into the stack, the distribution you have, and the brand you promote. So, yes, I think now is the time to create Ethena Pay, because the technology has finally reached a level where the profitability and services you offer can be made available to the average person or a grandma who just wants to save money in stablecoins. To them, it would look just like saving and earning a yield in dollars or another fiat currency.
It's funny that you mentioned Argent, because I was just about to mention Itamar. I think he deserves a lot of credit for putting forward this thesis at a very early stage. Back in 2019, he said that mobile devices are exactly the format that will attract millions and millions of users. And he was right; he was simply ahead of his time.
He literally went through hell all these years because he was building it on Ethereum, where transaction fees became too high. Then he had to switch to zkSync, and zkSync wasn't fully programmable at the time, so he switched to Starknet, which has its own problems today. So now it's moving to Base.
He had to fight all these technical obstacles that are now resolved, and I think he deserves a lot of respect. I completely agree. I think today is the time when the mobile interface finally allows you to engage the average person without having to explain anything unnecessary.
Of course, crypto apps have existed before, such as Binance or Coinbase, but I'm talking specifically about non-custodial crypto, which is much more difficult to make convenient for many reasons. And now it's no longer a problem.
Yes, you mentioned FOMO. It's amazing how quickly a product with quality UX can scale to 1 million or 2 million users, isn't it? When there are no more barriers to entry, it spreads like wildfire. One person says to another, “Use this. You can trade and make money.”
In our case, it will be, “Use this. You can spend money on the card, get cashback, or just keep your money no matter where you are, and get higher interest rates than at your local bank.” So, when there is an intuitive format, mobile apps go viral, something desktop apps like Rabby will never achieve.
Yes, I completely agree. I don't want to dwell on this for long, but I was the one who had to be convinced about mobile devices because I've only used a desktop for crypto my whole life. I never thought I would seriously get into crypto in a mobile app, but I've changed my mind drastically.
This is a huge turning point for mass adoption of crypto, because you need to reach customers while they're on the bus, walking somewhere, or just have their phone with them, away from their computer. You have simply significantly expanded the possibilities for interacting with users.
And I really think it will be a huge success. We are already seeing this, actually.
6. Competing in the DeFi neobank sector
One neobank competitor that we have to talk about literally changed my life. Let’s say I run my entire business on EtherFi, and I’ve already shown my accountants how it works. The borrowing mechanism on EtherFi just blew their minds. They were like, “Okay, so you have cryptocurrency, you take out a loan against it, and all your expenses are just loans against your cryptocurrency?”
So, you don’t spend your cryptocurrency and technically don’t create tax events on these borrowings. I finally brought it to their attention, and they thought it was some kind of alchemy or black magic. For me, EtherFi is probably the most prominent competitor in this niche. But how do you plan to compete with them and other players?
I think this field is going to be huge, and there will be a new competitor every day, because when something is successful in crypto, that’s what happens. So, what is Ethena’s overall strategy and go-to-market plan?
Yes, I completely agree. EtherFi is probably the biggest competitor, but definitely one of the leaders. I think Mike is a very capable founder, and we all respect him a lot. But really, it’s the whole industry, right? I think the guys at Plasma did a great job on the UX. We’ve talked about Itamar before, and he did a really good job too.
They all have their strengths and potentially their weaknesses, but I don’t want to throw mud at anyone here. Where I think we can have an advantage is—and by the way, I also completely agree that the field will grow significantly—we don’t necessarily have to lure EtherFi users in order to become big ourselves. I think we can attract new users.
A lot will depend on monetization, right? Here, I come back to the advantage we have over some competitors: We can generate revenue simply by monetizing base balances. When competitors have to overlay a DeFi vault on USDC, for example, it’s a kind of rehypothecation of USDC that’s already invested in Treasury bills. That same USDC is then reinvested into some kind of DeFi vault involving a bunch of different strategies.
As we’ve seen in the past with things like Celsius and Resolv, that hasn’t always been risk-free. I think our users really trust Ethena to manage $15 billion in assets at scale, and we have never lost a cent, weathering every storm we’ve seen in this space without incident. So, within the crypto-native segment, that’s our advantage: the trust we’ve been able to build over time.
But again, if we think the industry is about to grow, it’s really more about who can attract users after the crypto-native segment is somewhat saturated. This is where we truly believe in our team and its ability to execute on its plans. At the end of the day, for every company, the most important thing is execution. We could talk about product features and different strategies, but the only thing that can’t be copied is execution.
It’s the people on the team who are motivated, come in every day, have good ideas, and do everything they can to get those ideas to users. I think they also connect that to the UX of the product. I believe our product UX is much more user-friendly than many other products on the market. So, I’m pretty optimistic about our execution on that front.
7. What is Ethena’s new equity basis trade?
There’s another important update that I know we really wanted to ask you about. The Ethena trade, as it’s called, is a crypto basis trade. There was this trade that determined the profitability of USDe, where you essentially go 50% long and 50% short. Assuming the short positions receive payouts, you get this funding rate.
That was a great return when the bull market was in full swing last cycle. But we were obviously surprised to learn that the mandate for profitability was expanding. It looks like you’re moving in the direction of equity basis trading. What can you tell us about this trade? What exactly is it, and why does it make sense for Ethena right now?
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We’ve always looked at this segment, of course, but this is the first time we’ve actually been able to execute on it because of the segment’s growth. If you look at spot and perpetual contracts for RWAs or stocks on-chain, they grew significantly during the bear market. This is probably the only sector that has continued to grow consistently month after month.
It has reached a scale sufficient for us to allocate funds, and we also believe it will continue to grow. If you believe in the tokenization of everything and tokenized assets, then you believe that the volume of spot and perpetual stock trading will increase. I think they now account for about 50% of crypto open interest and volume.
In the not-too-distant future, you’ll probably have more trading in perpetual stocks than in crypto perpetuals. That would be a crazy shift, and it’s something that inspires us. But if you think about it, it makes sense, because if you look at the size of the stock market and the crypto market, stocks are 100 times bigger.
It’s quite logical, and it’s not a bearish signal for cryptocurrencies if perpetual stock futures become larger than crypto futures. Given that the market is already quite large and will continue to grow, it makes perfect sense that we would want to direct funds into this trading strategy. We know it works well for crypto, and it will work just as well for stocks.
That’s really the area where we have an advantage over anyone else in the market. We know how to perform this operation across multiple platforms in a secure manner, and we’ve already done so with billions in assets under management. No one else will be able to replicate it—not a neobank, not another DeFi protocol, no one at all. Therefore, we’ll be able to generate significantly higher rates of return by investing in stock-based trading.
8. What other strategies underpin sUSDe yield?
Yes, Lito. Unlike tokenized stocks, crypto has long been the most volatile asset, creating attractive funding rates. But in recent years, stocks have been showing incredible growth. You see AI company stocks increasing 10 times, and that’s not unusual anymore.
I’m sure all this volatility has created many more opportunities to take advantage of funding rates. But I also want to touch on the expanded mandate that Ethena now has. Beyond basic trading, you now have access to a variety of income streams, as I understand it. Can you name a few? What other strategies can provide returns for USDe?
You’re right. One of the benefits of stock-based trading is that it’s probably the only activity that remains profitable even in a bear market, while crypto trading, as we saw last year, contracts heavily when risk appetite in the cryptosphere declines. We’re quite optimistic and eager to start this stock trading, because people continue to trade stocks all the time, even when we’re in a bear market.
Sometimes they trade a little less, but the market is still huge. This applies to stock trading, to which we haven’t yet started allocating funds, but the process is already underway. This will happen literally in a few days. We made the announcement you probably saw about 2 weeks ago, and it’s about to go live.
Additionally, we’ve already begun underwriting loans for institutional borrowers who want to open long positions in Bitcoin and Ethereum. This is mainly through FalconX and some other institutional lending units. We also engage in DeFi lending to a limited extent, and finally, some lending through tokenized funds.
We focus only on very reliable, AAA-rated instruments, as well as Treasury bills and some liquid assets as a reserve buffer.
9. ENA token cleanup: buyouts, equity, buybacks, unlocks
I want to change the subject and talk about tokenomics. At the end of August, you made an announcement regarding the buyback from early seed investors, updates on token unlocks, token-to-stock matching, and buybacks. Can you briefly explain what this entailed and, ultimately, what it means for the Ethena token?
I was as surprised as you when this announcement came out. It came as a complete surprise. Essentially, this was something that Guy himself and some other interested parties discussed, but let me say for clarity that this information isn’t always disclosed to everyone, and I think that’s right. It demonstrates the company’s ethical principles.
So, reading the news, I learned, just as you did, about the buyback from existing investors who sold their tokens during their unlock. The fund approached them with a buyback offer. It turned out that it was at the very bottom, somewhere around 7 cents, so the timing was actually very, very good.
And it was pretty cool, because a lot of these investors don’t have tokens anymore, and the fund has more tokens. I think everyone is happy. Part of that announcement was also that all the other investors’ tokens were unlocked on an accelerated schedule. So instead of waiting another year for the vesting, they brought it forward, and the token will be fully unlocked on October 5. That is in 2 weeks.
As you know, a lot of crypto investors are pretty scared when there’s a token supply overhang, so that will be completely eliminated starting October 5. All the remaining supply will be in the market, I believe.
Dude, that was so nice to hear. I’m an ENA owner and investor, as is DeFi Dad, and literally 3 days before this announcement—which I’m surprised you didn’t even know about—I wrote something in our newsletter like, “Hey, you know what? I’m still playing the long game with ENA.”
That’s about all I’ve learned about investing. Sometimes it takes a long time to figure it out, but only people and teams matter. These are, after all, the people you are investing in. Even at the lows, I was like, “Yeah, no, this is still a team worth betting on.” Then, 3 days later, you make this announcement and the token just skyrockets. Honestly, everything you would want to see as a token holder was in that announcement. If I were to compose what I would like to see from Ethena, it would look something like this.
10. StablecoinX, the ENA DAT
I want to change the subject a little to something different. I also hold StablecoinX. It is a Nasdaq-listed digital asset management company that holds Ethena’s ENA tokens. It’s also perhaps a little confusing because on the Nasdaq they are listed as USDE. Again, I have very few of them, but I’m wondering if you have any information on what’s going on here, Lito. I know this is probably outside your area of expertise, but maybe you can tell me something about StablecoinX.
Yes, StablecoinX was around before I joined Ethena. This is a completely separate project from Ethena. It’s a private company where some people, like Tom Lee, who was bullish on ETH, decided to create a digital treasury instrument for ETH. There's someone else, I think his name is Te Chen, CEO of Stablecoin X, who decided to bet on the growth of ENA and, you know, believes in the development of digital dollars and so on.
USDE is a little confusing, but it’s not trying to be pegged to the dollar. It has a mandate to take a long position on ENA and accumulate ENA over time. I don’t have any other news besides what is already known. It seems they recently had a CEO change: the former head of Franklin Templeton is now in that position, while Tae Chen remains on the board of directors or as chairman. That’s literally all I know.
Yes, I’m watching this, and of course this is not financial advice, but if you’re bullish on stablecoins, I personally think this could be a good tool for a long position. Again, you should always be careful with things like blur, as these are quite complex tools. It’s worth putting this into your favorite LLM, asking questions, and figuring out what you don’t know about overhangs and things like that.
11. What’s next at Ethena?
But, Lito, before we let you go—you’re letting so much out. You just introduced Ethena Pay. You have expanded the mandate for profitability. You’ve sorted out the token and sorted out the tokenomics. It seems like the company is preparing for the next bull market. But I have to ask: can you tell us what else is expected that we may not know about, or what else you are working on? Not that all of this wasn’t enough. That’s great, but it seems like in the crypto community we’re always asking for more.
Yes, definitely. This is normal. Although I have to say, from the inside, I can see that the company is working on a bunch of things right now. There are many initiatives, and Ethena Pay is just one of the company’s products. It is expanding, we are very optimistic, and we are allocating a lot of resources to it. But I’m completely focused on this, so I don’t have the opportunity to pay as much attention to everything else that’s going on.
I think the Ethena team is incredibly talented in business development, so I wouldn’t be surprised if we make many new, great partnerships, as we always do. As we discussed, you will start to see equity-based trading launch. I think you will see the impact of this on the weekly USDe yield, which will likely increase. This will also contribute to increasing the market capitalization of USDe. And of course, this will be very profitable for Ethena Pay.
As for me, I’m focused on Ethena Pay, where we currently have huge demand: over 10,000 people on the waiting list, and we don’t have the capacity to onboard them all yet. So we’re moving step by step, week by week, taking into account the feedback we get and all that. This will keep us busy in the coming weeks, while our development team is working on implementing new features in Ethena Pay. We’re also planning a launch in the US soon, so that should be interesting.
12. Ethena Pay's key features and expected launch in US
Very cool. Before we let you go, can you summarize again what exactly you can do in the Ethena Pay mobile app? I know that you can earn Ethena’s yield there. It looks like we support USDC and USDT, and there appear to be fiat gateways for US dollars, British pounds, and euros. What else did I miss? Is there anything else? You can send instant payments, as I understand it, online.
You can send money to the app using any stablecoin, and it will automatically be converted to US dollars. The user stores these funds in US dollars and, without any additional action or depositing them into a deposit or savings account, they automatically start generating income of up to 6%. We have certain levels, but it’s essentially a pretty fixed rate. So we abstract away the floating component of the USDe yield.
You can also top up the app via bank transfer, as you mentioned, from a dollar, euro, or pound account. Quite uniquely, as I said, we don’t charge any commission for this—literally zero, no foreign exchange fees, nothing. Your money goes into a virtual bank account and is then minted into stablecoins that appear in your app.
This is a pretty unique value proposition for a neobank, as we make the onboarding process very simple, even if you’ve never had stablecoins before. You can send money to anyone who also uses Ethena Pay through a simple nickname system. You can type “@defidad” and, with no gas fees, send me money. It’s a bit like Venmo. I hope this becomes the primary way to pay for dinner or other expenses between crypto friends at conferences.
We can also make bank transfers to anyone, even to another jurisdiction. Last, but probably most important, is the card that is tied to your account. You can add it to Apple Pay and instantly spend from your digital dollar balance. Every time you spend, you get crypto cashback of up to 5%. We have the largest rewards budget of all of the players on the market.
Yes, we have the highest cashback. We created it to make it as easy as possible for anyone in the cryptosphere to sign up and, of course, get the best cashback on the market. To sum it up, it’s kind of like this: save, spend, and send money.
Lito, regarding deposits and withdrawals, are there specific networks, or are you limited to certain options? For example, if I have funds on the Ethereum, Base, or Avalanche networks, what options do I have?
This is something we have completely abstracted away. You won’t even know what network Ethena Pay is built on, because it looks like this: “I want to deposit stablecoins or any cryptocurrency.” After that, the system asks, “Which network do you want to make a deposit from?” You choose Ethereum and receive an address for the transfer. You send the funds there, and they automatically go to your Ethena Pay wallet.
You can top up your account from anywhere. No matter where your assets are, you simply generate a deposit address, and once funds arrive at it, they are sent to the Avalanche network, where Ethena Pay operates.
And the last question: I’m in the US. I think you said it’s not available to us yet, right? You can download the app from the App Store, but you can’t use it yet.
That’s right. Exactly. It will probably be available in the US in 3–4 weeks. We are very happy, because this is a huge market. If you look at the waiting list, a significant portion of users are from the United States. In addition, it is the country with the highest purchasing power in the world. So I think we’ll see that in the metrics right after the launch in the US.
Lito, I’m so glad to see you. It’s a pity that we don’t have much time. We definitely need to communicate more often. There’s so much in DeFi that we all constantly discuss and get excited about.
Before the recording, oddly enough, we were talking about Derive, because we just released a few episodes about it with on-chain options and Small World. We are all thinking the same thing. We look forward to what the next year, or even many years ahead, will bring.
But, Lito, one last thing before you go: keep up your great work, and we’ll be glad to see you again.
It was a real pleasure. We’ve met a few times before, but I think this is my first time on your podcast. Or maybe I’ve already been—I don’t remember.
But it was a lot of fun. I hope we meet again.
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